Thirty Years of Reforms to Budget Rules in Italy: An Econometric Evaluation

The paper verifies the effects of reforms in budget approbation rules in Italy during the 1980-2001 periods using a standard public choice model of fiscal performance and nonlinear principal component evaluation of the changes in the degree of stringency of budget rules. While the Italian reforms are evaluated relative to those carried out in other European countries, the model isolates the impact of such reforms on the country’s fiscal performance.